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Hong Kong will pay new parents more than $4000 for having a baby as the city’s birthrate plummets.

Hong Kong’s chief executive John Lee Ka-chiu announced the new initiative during his annual policy address on Wednesday, saying there will be a new handout of HK$20,000 (A$4058) to the parents of each baby born between now and 2026.

The move is in response to Hong Kong’s persistently low birth rate, which is just 0.9 births per woman — well below the 2.1 generally needed to ensure a stable population.

“Child-bearing is a major life decision involving many considerations,” Lee said during the address, in which he also announced a number of other financial measures.

The cash incentive comes on top of several existing tax breaks for new parents in Hong Kong, including annual tax deductions for each child and an extra deduction for newborns.

But the city’s new policy falls short of those in similar East Asian regions that are also struggling with low birth rates and ageing populations.

Singapore, for instance, has a birthrate of 1.05 and offers $12,700 (SGD$11,000) for the births of parents’ first and second child, and an additional $15,000 (SGD$13,000) for any subsequent children.

South Korea, which has the world’s lowest birthrate at just 0.78 offers $350 (300,000 won) per month until a baby turns one. The stipend is expected to rise to $1167 (one million won) per month starting in 2024.

In Japan, where the birthrate is 1.3, parents are given a monthly allowance of between $106 (10,000 yen) and $158 (15,000 yen) per child from their birth until they graduate from junior high at about 15 years old.

Though the cash boost sounds generous, it may not go far in Hong Kong, which is one of the most expensive cities in the world in which to live.

In 2023, it was ranked by Mercer the most expensive city in the world for international employees, followed by Singapore and Zurich.

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By Rahul

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